For over half a century, North Korea has been using the same negotiating tactics. These consist of always asking for far more than you'll ever get, arguing over every detail and never reaching any conclusive agreement. All this is done in the most abrasive and annoying manner possible. This sort of thing is an unattractive aspect of Korean culture, combined with Marxist rhetoric and tradecraft, that many current observers don't quite know what to make of. It's all very simple. For the last sixty years, North Korea has been a police state run by a hereditary dictatorship (the Kim family) and a few hundred families holding senior positions in the government and military. This crew has ruined the economy, killed about ten percent of the population in the last decade (mostly by starvation) and is deathly afraid of retribution from the people they rule over, or international bodies (like war crimes tribunals). It's a matter of life and death for Kim & Company. The North Korean economy is broken, and Kim needs food, money and energy to keep the police part of the police state going. If their police protection falters, Kim and Company are doomed. Desperate men do desperate things. That, in a nutshell, is what is going on in North Korea.
November 1, 2006: Japan, long an unofficial supplier of much cash and information to North Korea, is gradually eliminating that support. Five years ago, North Korea did over a billion dollars worth of trade with Japan. That is now down to less than $200 million, and sinking fast. There are some 200,000 pro-North Korean Koreans living in Japan, who send millions of dollars a year to North Korea. These Koreans were stranded in Japan after World War II, and are still seen as "foreigners" by the Japanese (another 400,000 Koreans are more integrated in Japanese society, and do not support North Korea). These "pro-North" Japanese-Koreans are increasingly cut off from North Korea. Fewer ships can move between Japan and North Korea. This is cutting off more vital foreign currency and other resources (like information from the Japanese Koreans, who often act as spies for their "brothers" across the way.)
October 31, 2006: North Korea agreed to resume disarmament talks, after China threatened to halt oil and food shipments to North Korea. China is North Korea's primary supplier of oil. North Korea faces another famine this Winter, because food aid has dried up, in response to the recent North Korean nuclear tests. China has also shut down some North Korean access to Chinese banks. This is particularly harmful to the North Korean government, which depends on use of the banking system to keep its currency counterfeiting and illegal drug trade operations going. These two endeavors are a primary source of foreign currency, and the luxury goods needed to keep the senior North Korean officials loyal to the small group of men who run North Korea.
October 29, 2006: The director of the South Korean National Intelligence Service (NIS) has resigned. NIS failed to see the North Korean missile or nuclear tests coming.
October 27, 2006: North Korea has made it increasingly clear that what it is most angry about is U.S. restrictions on North Korean access to the international banking system. Earlier this year, the U.S. put these restrictions in place, and during the Summer, China and Japan enacted restrictions as well. More than any other pressure in the past, these banking restrictions really hurt. North Korea has been demanding they be lifted, and the missile and nuclear weapons tests were mainly to that end. The banking restrictions have made it much more difficult to run drug and counterfeiting scams, or get the luxury goods and weapons needed to keep the police state going. More of the rulers in North Korea are complaining.